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home : local news : local news
February 19, 2018

2/9/2018 6:03:00 PM
Could Jackson Council compromise be near?
Officials discuss income tax, severance incentive, electric rate cuts
A number of possible options were discussed Thursday night during a meeting of Jackson Councilís Budget and Finance Committee with regard to how to prevent major projected general fund budget shortfalls. Pictured is Mayor Randy Heath (center) addressing council while Service Director Bill Sheward (right) and Councilman Butch Aldrich listen. (Telegram Photo By Red Thompson, Jr.)

A number of possible options were discussed Thursday night during a meeting of Jackson Councilís Budget and Finance Committee with regard to how to prevent major projected general fund budget shortfalls. Pictured is Mayor Randy Heath (center) addressing council while Service Director Bill Sheward (right) and Councilman Butch Aldrich listen. (Telegram Photo By Red Thompson, Jr.)


RED THOMPSON, JR.
Staff Writer


A severance incentive package, a new one-percent city income tax, along with an electric rate decrease. Those were all topics discussed when Jackson City Council's Budget and Finance Committee met Thursday night to discuss the city's current budget crisis.

Although it only was a committee meeting, Mayor Randy Heath and the entire council were present. The meeting produced some elements of compromise while there are still some differences lingering on the topic. Another part of the meeting was a seven-page report, complete with detailed figures, Mayor Heath created and presented to council and members of the local media.

One issue council was able to agree on was starting a process developing language for the severance incentive package. The Committee directed City Law Director Joe Kirby to begin that process and bring a resolution to council when they are in regular session again. Although nothing has been set is stone, the city is looking at offering an incentive to six veteran Jackson police officers -- and possibly more employees -- as part of the cost-savings plan. City Auditor Brent Reed explained council wants to make sure of the legalities of doing this while also determining if the offer can, or must be, offered city-wide. Everyone around the table agreed this process has to be done legally and in a way that will not generate a negative audit finding.

Heath explained while this is not perfect, it moves the city in the right direction. Among the positives mentioned was a proposed electric rate decrease as suggested by Heath. It is, however, contingent on the income tax taking effect. In this scenario, the general fund would have a new source of money (the income tax) so Mayor Heath feels the city can lower electric rates by two percent in 2018, two-and-a-half percent in 2019, three percent in 2020 and four percent thereafter, based on current rates.

Time running short

Mayor Randy Heath and several council members discussed a shortening time table on how to close a projected hole in the general fund ranging from $1.2 to $1.4 million. The shortage comes from a State Auditor's Office finding stating the city cannot use right-of-way utility rental fees to fund the police department.

Heath stated this was how the city funded the police department in the past, but now a new plan must be secured.

"Now, we have been told we can't do it this way anymore," Heath said. "We were are at a critical time late in the ball game and the next basket wins. I want to save our city."

He stated, although Jackson is one of Buckeye State's only cities to not have an income tax, there is a major difference between Jackson and the other three communities with regard to property tax millage rates. Those cities and rates are: Courtland (22.5 mills), Bellbrook (19.5 mills) and Beaver Creek (18.5 mills) while Jackson is at 6.7 mills. In Jackson, 3.5 mills of the total is dedicated to the fire department. Heath stated even with the tax, Jackson is at the bottom end of the collection scale.


The only other suggestion to cut the budget without an income tax came from Council President Eric Brown. He suggested the severance incentive package be extended to up to 13 employees to save a projected $900,000. He also suggested the city's franchise fees, currently set at $83,049.06, be sustainably raised and the rest of the deficit could be made up. Brown says the fee rate is far too low. This money mostly comes from Spectrum for cable and Internet services, but there is also a fee assessed to Rumpke for trash collection. Heath did agree that this plan may work, except for two problems: one being a possible labor shortage this action would create and the other a possible need to cut in the future.

Heath: Why an income tax is needed

Heath stated the city needs to pass an income tax by March for it to be effective. He stated he will try to work with the state on options such as being legally allowed to make transfers on a declining basis from the electric fund to keep the city going until all the income tax revenue starts being accrued. Heath also stated the city is losing $100,000 a month and if nothing is done, layoffs of 13 police officers and four general fund employees will have to take place.

Heath stated layoffs could be costly, however, as the projected cost savings has only been tabulated with regard to salaries. Reed explained he has not yet figured out the costs of unemployment and vacation payments that the city would have to pay as well for those employees that would be laid off. Mayor Heath also added that there may be some unforeseen costs of businesses closing because of the lack of police protection.

"We are a retailing center and businesses reporting crimes are not going to like it if there is no protection," said Heath. "We have always lived hand-to-month, but we have to start planning for the future. I hate doing this (imposing an income tax) but I feel it is justified."

Also, a comment was made from the audience as John Peters stated the electric rates were too high and accused the city of "just wanting to find legal ways to move money around," which Mayor Heath said was not true.

Several council members, including Jon Ondera, said the plan was "plausible" and thanked Heath for his efforts. While all of council is not in agreement, they are on the road toward developing a plan everyone can live with for the betterment of the city.



Reader Comments

Posted: Monday, February 12, 2018
Article comment by: SMSgt Carl Corvin

I have no problem with the city voting in favor of an income tax-- provided, if the voters approve--that the $1,500,000.00 that would be generated by the income tax receipts be offset by the same amount from the money that has been taken from the utility fund and transferred to the general fund. The utilities should be cut to reflect the amount NO longer needed. I say cut the electric, water, sewer rates by 25% on the day the voters approve an income tax. 'Nuff Said!

Posted: Monday, February 12, 2018
Article comment by: Greg Hollback

SM Sgt Corvin, Mr. Reed, would you please share with Telegram readers what other funding solutions are available? Readers and council members may benefit from hearing a "yes, and" approach.

Posted: Saturday, February 10, 2018
Article comment by: SMSgt Carl G. Corvin

Are you kidding! A 4.5% cut in electric rates by 2020! If the rates were cut by 4.5% today- Jackson (TAX$ON) would still have the highest electric rates in this state and many others! I say cut them 25% today!

Posted: Friday, February 9, 2018
Article comment by: Doug Reed

Typical Democrat....justify why taxes are necessary while being over-paid! Maybe his and service director's pay should be zeroed out while they sit on their butts and "figure" things out!




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